Ukraine Signals Conditional Satisfaction with European Security Guarantees While Awaiting U.S. Commitment

Russia-Ukraine Conflict

Political

Summary:

President Zelensky expresses 90% satisfaction with Europe's security guarantees but stresses the importance of formal U.S. backing through congressional approval...

Partial Fulfillment of Security Promises from Europe

Ukrainian President Volodymyr Zelensky has publicly acknowledged meaningful progress in negotiating security guarantees from European nations. In an interview with Poland’s PAP news agency on December 20, he stated that while not all elements met Ukraine’s expectations, the current framework satisfied the country “by 90%.” This qualified satisfaction reflects both appreciation for Europe’s commitment and recognition of outstanding gaps particularly the absence of concrete legislative guarantees from the United States.

Zelensky emphasized that the remaining 10% of concern relates to awaiting formal approval of U.S. guarantees by the U.S. Congress, which would elevate these arrangements from political intent to enforceable strategic assurances. The statement reflects Ukraine’s strategic dependency on transatlantic cooperation and the need for comprehensive deterrence against potential future Russian offensives.

Security Guarantees as Pillar of Peace Strategy

Security guarantees are one of three pillars in a broader peace framework proposed by the United States. The plan has recently undergone revisions to address evolving battlefield realities and political negotiations. A key element involves the proposed size of the Ukrainian armed forces, which Zelensky confirmed would stand at approximately 800,000 troops. This number, he asserted, aligns with the current operational needs of Ukraine’s military infrastructure.

The strategy, jointly shaped by Washington and European allies, focuses on preventing further Russian aggression through a layered deterrence architecture. Under this proposal, Ukraine’s military will serve as the primary line of defense, with continued military support including weapons transfers and comprehensive training ensuring operational readiness.

The underlying logic suggests a causal relationship between a strong, well-equipped Ukrainian force and the reduction of future escalation risks. However, this assumes consistent external support, which is still subject to political shifts within donor countries.

The Role of the U.S. and NATO-Aligned Forces

The U.S. commitment extends beyond arms supply. As outlined by Bloomberg, the United States is expected to provide intelligence and surveillance capabilities to monitor compliance with any eventual peace agreements, particularly along designated demarcation lines. This reinforces a preventive security framework designed to detect and deter violations early.

A notable development in this security architecture is the proposed involvement of a “Voluntary Alliance” of troops from European nations. These forces would be stationed away from active combat zones, functioning as a stabilizing presence and confidence-building mechanism. While their deployment is designed to avoid provocation, it also serves as a symbolic reminder of European commitment to Ukraine’s sovereignty.

European leaders have also signaled their openness to operating within Ukrainian territory, further blurring the traditional boundaries of non-NATO engagement in Eastern Europe. This strategic choice reflects both geopolitical solidarity and a practical response to the failures of pre-war deterrence models.

Implications for Future Escalation Scenarios

The core of the joint plan between the West and Ukraine rests on a sequential escalation response. If conflict resumes, the Ukrainian army will act as the first buffer. Diplomatic channels, led by Ukraine’s allies, will be activated rapidly in an attempt to de-escalate tensions. However, should such efforts fail, Ukraine will be eligible for additional military support, including advanced capabilities likely to be drawn from U.S. stockpiles.

This tiered response structure illustrates a combination of deterrence and containment strategy. The emphasis on diplomacy before escalation control highlights a preference for avoiding direct NATO engagement unless absolutely necessary, thus reflecting a deliberate balance between commitment and risk aversion.

However, this also reveals a correlative vulnerability: should Western political will weaken or coordination falter, Ukraine may find itself strategically exposed. Hence, President Zelensky’s insistence on formalizing U.S. commitments through congressional action appears as an attempt to lock in long-term support regardless of future political fluctuations in Washington.

Strategic Progress, but Conditional Stability

While Ukraine has secured near-complete support from Europe and sees steady momentum in implementing a coordinated post-war defense framework, the absence of binding U.S. guarantees remains a critical uncertainty. Zelensky’s careful phrasing acknowledging satisfaction without complacency reveals an acute awareness of how geopolitical assurances can be undone by legislative inertia or political volatility.

The 800,000-strong army plan, the surveillance pledges, and the European deployment proposals form a comprehensive but fragile structure one that hinges on sustained alignment across the Atlantic. Without congressional ratification of U.S. commitments, Ukraine’s security framework risks remaining incomplete, leaving open strategic gaps in a still-volatile regional landscape.

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Gerik

Economic

Historic Surplus and the Illusion of Immunity

In the first eleven months of 2025, China achieved an unprecedented trade surplus exceeding $1 trillion. Exports totaled $3.4 trillion while imports declined to around $2.3 trillion, driven by the country’s sustained ability to sell goods globally despite being subjected to U.S. tariffs reaching up to 145%. Rather than collapsing under pressure, Chinese exports adapted and even thrived, reinforcing the country's longstanding image as the “world’s factory.” However, this milestone is more symptomatic of underlying structural risks than a definitive strategic victory.

This export growth is viewed by analysts such as Citigroup’s Xiangrong Yu as a core driver of China’s 2025 GDP, prompting an upward revision of growth forecasts to 5%. This projection assumes that China’s global trade engine will continue to operate at high efficiency. Yet, this very success is creating new points of vulnerability.

Shifting Markets and Strategic Diversification

One of the key factors explaining China’s resilient export performance lies in its reorientation toward emerging markets. While exports to the United States dropped by 18.3% year-on-year, China compensated with strong increases in exports to Europe (8.9%), Southeast Asia (14.6%), and Africa (27.2%). This trend illustrates a correlation between market diversification efforts and export stability, though it does not conclusively prove causation due to the simultaneous role of global trade dynamics.

Another driving factor is the weak yuan, maintained through a controlled float, which enhances the price competitiveness of Chinese goods abroad while suppressing import volumes. Furthermore, long-term industrial planning epitomized by the “Made in China 2025” strategy has enabled China to climb the value chain, dominating not just in low-cost manufacturing, but also in electric vehicles, semiconductors, and renewable energy components such as solar panels and rare-earth elements. In 2024 alone, electronics exports exceeded $1 trillion.

Export Strength Conceals Strategic Risks

Despite the impressive numbers, several experts argue that China’s trade data may overstate its true diversification. A portion of export growth to regions like Southeast Asia could reflect rerouted shipments destined for the U.S., raising the likelihood of further trade penalties. This interpretation aligns with recent signals from Washington that hint at tougher enforcement of tariff rules and restrictions.

Simultaneously, Beijing’s rising surplus with Europe has triggered friction with the EU. French President Emmanuel Macron and German officials have expressed serious concerns about the widening trade imbalance and the distortion of competition caused by Chinese industrial overcapacity. Such complaints are materializing into policy: the EU has announced a minimum tax of 3 euros on low-value imports, of which 90% originate from China.

This rising asymmetry is reshaping global trade relations. European firms are losing market share both within China and across third-party markets, as Chinese goods dominate due to their pricing advantage. According to the European Central Bank, this phenomenon could jeopardize up to 50 million jobs across the Eurozone, particularly in sectors directly exposed to Chinese competition.

Fragility of the Export-Driven Model

At a fundamental level, China's economic model remains heavily reliant on external demand. Domestic consumption remains insufficient to absorb the massive industrial output, making export-led growth not just a strategy but a necessity. This structural imbalance means that any shift in global trade policies or even small demand contractions in key partner economies could disproportionately impact Chinese manufacturing and employment.

Emerging markets in the Global South, while absorbing more Chinese exports in 2025, do not offer the scale or long-term stability of U.S. and EU markets. ASEAN, for example, imported $53 billion worth of Chinese goods in October alone, overtaking the U.S. and EU as China's largest export destination. Trade with India also surged 30% this fiscal year. However, this growth may not be sustainable.

Countries such as Indonesia, India, and Mexico are pushing back against the influx of Chinese goods. Mexico recently voted to impose new tariffs, while Indonesia restricted direct online sales from China. In India, the trade deficit with China has surged toward $100 billion, prompting increasing political pressure for intervention.

These developments signal a growing reluctance among developing economies to remain passive recipients of Chinese overcapacity. Many aim to nurture their own domestic industries and are wary of becoming dependent on low-cost imports that undermine local production capabilities.

Surplus as a Sign of Strategic Exposure

While China’s record trade surplus demonstrates its formidable manufacturing and logistics capacity, it also exposes the country to escalating trade frictions and long-term strategic risks. The success of export-led growth is increasingly contingent on fragile and shifting geopolitical relationships. As countries grow wary of Chinese dominance in both low-cost and high-tech sectors, Beijing’s options for maneuvering are narrowing.

In this context, the trade surplus acts less as a buffer and more as a mirror reflecting China’s heavy exposure to the world’s economic currents. Without meaningful structural reforms to boost domestic consumption and reduce reliance on foreign markets, the durability of China’s growth path remains questionable. The story behind the headline surplus is not just one of triumph, but of mounting tension, dependence, and the limits of an externally oriented development strategy.

To stay updated on all economic events of today, please check out our Economic calendar

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Manuel

Political

Stocks

President Donald Trump said he would convene insurance companies in the coming weeks in a bid to pressure them to reduce costs for Americans who will see their premiums rise following the expiration of Obamacare subsidies at year’s end.

“I’m going to call a meeting of the insurance companies,” Trump told reporters on Friday at the White House. “I’m going to see if they get their price down, to put it very bluntly.”

Trump said the meeting could happen next week when he was at his Mar-a-Lago estate in Florida for the holidays, or during the first week of January when he returned to Washington. He said he had come up with the idea on the spot, at an event where he listened to pharmaceutical company executives pledge to donate drugs as part of a deal to avoid tariffs.

Shares of major insurers UnitedHealth Group Inc. (UNH), Cigna Group (CI) and Humana Inc. (HUM) pared gains sharply on Trump’s remarks.

AHIP, a trade group representing health insurers, said premiums reflect the cost of medical care and that insurers’ margins and administrative costs are regulated. “Health plans are doing everything in their power to shield Americans from the high and rising costs of medical care,” AHIP Chief Executive Officer Mike Tuffin said in an emailed statement.

Trump said that while he still preferred a plan that would give Americans direct subsidies to purchase insurance, an agreement to reduce costs could help preserve the Obamacare exchanges.

Insurance companies “are making so much money, and they have to make less, a lot less,” he said. “And maybe we can have reasonable health care without having to cut them out and let it all go awry.”

Congress left Washington earlier this week without extending the subsidies. Health care premiums for more than 20 million Americans will, on average, more than double in 2026, which risks putting insurance out of reach for many voters already concerned about the costs of housing, groceries, utilities and other expenses.

When lawmakers return to the Capitol next month, they have less than two weeks to resolve the issue before open enrollment ends Jan. 15. Democrats focused relentlessly on the Obamacare premium spikes six months, making it the centerpiece of their demands during the six-week government shutdown this fall.

Source: Bloomberg

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Manuel

Commodity

Political

Oil prices edged up on possible disruptions from a U.S. blockade of Venezuelan tankers as the market waits for news about a possible Russia-Ukraine peace deal.

Brent futures rose 65 cents, or 1.1%, to settle at $60.47 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 51 cents, or 0.9%, to settle at $56.66.

That put Brent and ‌WTI down about 1% this week after both crude benchmarks fell about 4% last week.

In other energy markets, a recent drop in U.S. gasoline futures to a four-year low ‌cut 321- and gasoline crack spreads, which measure refining profit margins, to their lowest since February.

"The (oil) complex is posting small gains in holding above lows established earlier this week as it awaits further guidance regarding Ukraine/Russian peace talks as well as fresh headlines out of Venezuela as to the potential impact of the apparent Trump tanker blockade," analysts at energy advisory firm Ritterbusch and Associates said in a note.

As U.S. President Donald Trump seeks an ⁠end to Europe's deadliest conflict since World War Two, ‌Russian President Vladimir Putin said the onus was on Ukraine and Europe to make the next move toward peace.

European Union leaders decided on Friday to borrow cash to loan 90 billion euros ($105 billion) to Ukraine to fund ‍its defense against Russia for the next two years rather than use frozen Russian assets, sidestepping divisions over an unprecedented plan to finance Kyiv with Russian sovereign cash.

Putin offered no compromise on Friday on his terms for ending the war in Ukraine and accused the European Union of attempting "daylight robbery" of Russian assets.

Ukraine, meanwhile, struck a Russian "shadow fleet" oil tanker in the Mediterranean Sea with aerial drones for the first time, an official said on Friday, ‌reflecting the growing intensity of Kyiv's attacks on Russian oil shipping.

VENEZUELA BLOCKADE

U.S. Secretary of State Marco Rubio on Friday told reporters that the United States is not concerned about an escalation with Russia when it comes to Venezuela, as the Trump administration builds up military forces in the Caribbean.

Trump told NBC News in an interview that he was leaving the possibility of war with Venezuela on the table.

Uncertainty over how the U.S. would enforce Trump's intent to block sanctioned tankers from entering and leaving Venezuela tempered geopolitical risk premiums, IG analyst Tony Sycamore said.

Venezuela, which pumps about ⁠1% of global oil supplies, on Thursday authorized two unsanctioned cargoes to set sail for China, said two sources familiar with Venezuela's oil export operations.

A sanctioned tanker carrying some 300,000 barrels of naphtha from Russia entered Venezuelan waters late on Thursday, while three others also under sanctions either stopped navigation or began redirecting course in the Atlantic Ocean, ship tracking data showed.

The U.S. on Friday imposed sanctions ‍on family members and associates of ⁠Nicolas Maduro and his wife, as Washington ratchets up pressure on the Venezuelan president.

U.S. PRODUCTION WORRIES?

The rig count in the Permian Basin in West Texas and eastern New Mexico, the biggest U.S. oil-producing shale formation, fell by three this week to 246, the ⁠lowest since August 2021, according to data from U.S. energy services firm Baker Hughes.

The rig count is an early indicator of future output. A lower count can point to ‌a decline in future output.

Source: Reuters

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Manuel

Energy

Political

Georgia's only private electric utility plans to increase power capacity by 50% after state regulators on Friday agreed 5-0 that the plan is needed to meet projected demand from data centers.

It would be one of the biggest build-outs in the U.S. to meet the insatiable electricity demand from developers of artificial intelligence. The construction cost would be $16.3 billion, but staff members say customers will pay $50 billion to $60 billion over coming decades, including interest costs and guaranteed profit for the monopoly utility.

Georgia Power Co. and the Public Service Commission pledge large users will more than pay for their costs, and that spreading fixed costs over more customers, could help significantly cut residents' power bills beginning in 2029.

“Large energy users are paying more so families and small businesses can pay less, and that’s a great result for Georgians,” Georgia Power CEO Kim Greene said in a statement after the vote.

But opponents say the five elected Republicans on the commission are greenlighting a risky bet by the utility to chase data center customers with existing ratepayers left holding the bag if demand doesn't materialize.

“The need for 10,000 megawatts of new capacity resources on the system in the next six years isn’t here," said Bob Sherrier, a lawyer representing some opponents. “It just isn't, and it may never be.”

The approval came less than two months after voters rebuked GOP leadership, ousting two incumbent Republicans on the commission in favor of Democrats by overwhelming margins. Those two Democrats won in campaigns that centered on six Georgia Power rate increases commissioners have allowed in recent years, even though the company agreed to a three-year rate freeze in July.

Peter Hubbard and Alicia Johnson — the Democrats who will take office Jan. 1 — opposed Friday's vote. But current commissioners refused to delay.

Electric bills have emerged as a potent political issue in Georgia and nationwide, with grassroots opposition to data centers partly based on fears that other customers will subsidize power demands of technology behemoths.

Georgia Power is the largest unit of Atlanta-based Southern Co. It says it needs 10,000 megawatts of new capacity — enough to power 4 million Georgia homes — with 80% of that flowing to data centers. The company has 2.7 million customers today, including homes, businesses and industries.

Whether the company’s projections of a huge increase in demand will pan out has been the central argument. Georgia Power and commission staff agreed Dec. 9 to allow the company to build or acquire all the desired capacity, despite staff earlier saying the company's forecast included too much speculative construction.

In return, the company agreed that after the current rate freeze ends in 2028, it would use revenue from new customers to place “downward pressure” on rates through 2031. That would amount to at least $8.50 a month, or $102 a year, for a typical residential customer. That customer currently pays more than $175 a month, including taxes.

"So we’re taking advantage of the upsides from this additional revenue, but allow it to shift the downside and the risk over to the company. And I’m real proud of that," Commission Chairman Jason Shaw said after the vote.

But “downward pressure” doesn't guarantee a rate decrease.

"It doesn’t mean your bills are going down," said Liz Coyle, executive director of consumer group Georgia Watch. “It means that maybe they’re not going up as fast.”

Existing customers would pay for part of the construction program that doesn't serve data centers. More importantly, opponents fear Georgia Power's pledge of rate relief can't be enforced, or won't hold up over the 40-plus years needed to pay off new natural-gas fired power plants.

In a Monday news conference, Hubbard likened it to a mortgage “to build a massive addition to your home for a new roommate, big tech.”

"If in 10 years, the AI bubble bursts or the data centers move to a cheaper state, then the roommate moves out, but the mortgage doesn’t go away,” he said.

Staff members say the commission must watch demand closely and that if data centers don't use as much power as projected, Georgia Power must drop agreements to purchase wholesale power, close its least efficient generating plants and seek additional customers.

Many opponents oppose any new generation fueled by natural gas, warning carbon emissions will worsen climate change. Some opponents were escorted out of the commission meeting by police after they began chanting “Nay! Nay! Nay! The people say nay!”

“Increased natural gas output for the sake of these silicon billionaire kings seems like a lose-lose," opponent Zak Norton told commissioners Friday.

Source: AP

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Manuel

Economic

Home sales notched their third straight month of gains in November, though 2025 sales are likely to finish the year at a 30-year low.

Existing home sales rose 0.5% from October to a seasonally adjusted annual rate of 4.13 million, according to National Association of Realtors data released on Friday. Lower mortgage rates were likely a boost: Homes sold in November typically went under contract during September or October, around when mortgage rates began holding steady near year-to-date lows of 6.2%.

“The low mortgage rate conditions of this autumn compared to the early part of the year is clearly helping some of the affordability conditions,” said NAR chief economist Lawrence Yun.

Although home sales have improved in recent months, the housing market is still in a deep slump stemming from high prices, elevated mortgage rates, and consumer unease. Home sales for the year are on track to be the lowest since 1995, and November’s improvement was below the 1.2% gain analysts had been expecting.

Sales rose month over month in the Northeast and South, while they were flat in the West and dropped in the Midwest. Compared with a year earlier, sales are down 1%.

The winter months typically bring a seasonal slowdown in sales activity. Housing inventory dropped 5.9% to 1.43 million units last month compared to October, but it’s still a 7.5% improvement from November 2024.

Next year, the health of the labor market and trends in inflation will be key influences on the market, Selma Hepp, chief economist at Cotality, said in a statement.

“A rebound in the housing market hinges on a solid labor market, income growth, and economic resilience amid the continued affordability crisis, elevated mortgage rates, and consumer discontent,” Hepp said.

Source: Yahoo Finance

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Forex

Cryptocurrency

The EU Council on Friday backed a negotiating position for a digital euro that includes both online and offline functionality, diverging from earlier European Parliament proposals that focused solely on offline usage.

Under the Council's new position, the digital euro would ‌be publicly issued by the European Central Bank and usable anytime, anywhere, whether users are connected to the internet or offline.

Fernando ‌Navarrete, the European Parliament rapporteur for the digital euro, had advocated for an offline-only model to preserve users' privacy and the resilience of the unit itself, with the central bank to operate as the currency's regulator.

Online transactions would involve immediate processing through the central bank's ledger or through authorised intermediaries, while offline transactions can ⁠be recorded locally and later synchronised ‌with the central ledger when connectivity resumes, meaning the system can be used even in areas with poor connectivity while preserving cash-like privacy for its users.

The ‍ECB is working to introduce a digital euro to modernise its payment system and ensure central bank money remains relevant in an increasingly digital world. With cash use declining, a central bank-issued digital currency would help maintain monetary sovereignty and trust in the currency.

The project, however, is advancing slowly and faces resistance from portions of ‌the banking sector.

Council ministers endorsed offline usability for everyday flexibility and resilience in case of power outages. But they also included online access to support a broader set of digital payments.

The Council's mandate sets out key design features, including limits on digital euro holdings to prevent it from endangering financial stability by draining away deposits from banks.

These ceilings will be determined by the ECB, subject to an overall cap ⁠reviewed every two years.

Providers must offer certain basic digital euro services free of charge, though fees will apply for value-added features.

A transition period of at least five years will cap interchange and merchant fees at levels in line with existing payment methods, with fees adjusted afterward based on ‍actual costs.

The Council's agreement ⁠clears the way for negotiations with the European Parliament on the legal framework for the digital euro. The Council, formally called the Council of the European Union, represents EU member states' governments, and ⁠it works alongside the European Parliament to adopt laws.

Once that is adopted the ECB can proceed to issue the digital ‌euro, which it has said could be operational by 2029 after a pilot phase ‌in 2027.